A retired consultant passed confidential tips about children's clothing company Carter's Inc. to two hedge fund managers, who used the information to make about $2 million, the Securities and Exchange Commission said.

The regulator on Tuesday sued Dennis Rosenberg, accusing him of earning some $500,000 on the tips, both from investing on them himself and in consulting fees from the hedge funds, which were not identified. The SEC said that Rosenberg received the tips from a former Carter's executive between 2005 and 2010.

Rosenberg has settled the allegations and will pay more than $600,000, plus civil penalties to be decided later. He did not admit or deny any wrongdoing.

Rosenberg's is the third insider-trading case at Carter's in as many years; two former vice presidents at the company pleaded guilty to criminal charges.

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